States with no income tax?

[JNursee]

I've talked to a banker recently and found out that in some states people don't have to pay any income tax whatsoever. If I remember correctly those states include Florida, Washington, Nevada and a few others. Let's face it - paying 25% of your salary on top of other expenses like student loans, mortgages and bills is not much fun and not much money is left (we are not making millions here, right?). On the other hand, those states without income tax have other ways to compensate the difference, like high property tax and high taxes on regular purchases. I wanted to ask the nurses who live in those states without income tax if you feel like your gross income can fully compensate for higher living expenses?

Any other opinions?

[amoLucia]

There's info on google. Some states defer federal, some defer state, some defer both. Some states have state sales tax, some don't. Some places have other different taxes they collect.

I was thinking - taxes fund some services, so if a tax is deferred what service is not provided. I had a friend in New Hampshire - there were no municipal service like garbage collection. Residents had to pack up their trash and drive to the municipal dump to dispose of it. Not fun if you're elderly or in bad NH weather.

I get a kick out of 'city taxes'. I worked one place and they called it 'privilege tax'. I guess that I was privileged to work in that community.

[Esme12, ASN, BSN, RN]

Ok, I see what you mean guys. I've only been living in the US for a few years and even though we pay taxes, I don't really know how they separate it into state and federal. Also, the accountant confused me because he said "if you make, for example, 80k a year, you are keeping the whole amount and not paying anything". This phrase made me think that there are no taxes at all to be paid in those states. I was surprised and thought why would people ever want to live anywhere else lol

Then you need to pay atention to what you are paying if you are not doing your own income tax...State taxes are filed separately from federal income tax you should be signing 2 income tax returns state and federal. There are certain tax laws for immigrants that vary slightly from state to state and some federal laws that can exempt you from federal income tax. They have to do with how many days you reside in the states and reside in your home country. But for the most part everyone has to pay federal income tax and while some states do not have state tax property tax and sales tax can be expensive...New Hampshire is another state without state income tax.

[toomuchbaloney]

Alaska, no state income tax.

All residents receive the Permanent Fund Dividend, payment for the use of the state's resources.

Cost of Living is over the top because Alaska is sort of over the top...

[roser13, ASN, RN]

There's info on google. Some states defer federal, some defer state, some defer both. Some states have state sales tax, some don't. Some places have other different taxes they collect.

I was thinking - taxes fund some services, so if a tax is deferred what service is not provided. I had a friend in New Hampshire - there were no municipal service like garbage collection. Residents had to pack up their trash and drive to the municipal dump to dispose of it. Not fun if you're elderly or in bad NH weather.

I get a kick out of 'city taxes'. I worked one place and they called it 'privilege tax'. I guess that I was privileged to work in that community.

States cannot do away with Federal taxes. States don't have that power. Not sure what you mean by "defer."

Every law-abiding citizen of the U.S. with an income above a certain level pays Federal income tax.

[amoLucia]

To roser13 - I didn't read too deeply in the couple of items on google, but yes, I do believe they did say there were states not paying into federal taxes. Now if I'm wrong, I'm wrong and mea culpa!

I couldn't think of another word, other than defer, when I posted before. Maybe 'exempted' would have been the better word. "Declined, opted out" ???

[That Guy, BSN, RN, EMT-B]

• Alaska
  
• Florida
  
• Nevada
  
• South Dakota
  
• Texas
  
• Washington
  
• Wyoming
  

[roser13, ASN, RN]

To roser13 - I didn't read too deeply in the couple of items on google, but yes, I do believe they did say there were states not paying into federal taxes. Now if I'm wrong, I'm wrong and mea culpa!

I couldn't think of another word, other than defer, when I posted before. Maybe 'exempted' would have been the better word. "Declined, opted out" ???

LOL! Gonna have to trust me on this one. Unless a state has seceded from the Union, its citizens ARE paying Federal income tax. Do you really think the IRS (or all the other states, for that matter) would allow entire state populations to just decide not to pay taxes?!

If this were the case, don't you think there'd be a mass influx into those states and out of the federal tax-paying states?

p.s. I really can't believe we're having this conversation.

[Esme12, ASN, BSN, RN]

1. Alaska

- Tax collections per capita: $7,708 (the highest)

- State revenue per capita: $17,630 (the highest)

- State spending per capita: $15,663 (the highest)

- Federal aid as a pct. of revenue: 24.0 percent (the lowest)

- State sales tax rate: N/A

Despite having no income tax, Alaska actually collected more in taxes per capita than any other state, at $7,708 in fiscal 2011. Because it raised so much in taxes, Alaska had the highest per capita government expenditure of any state in the U.S. during 2011, exceeding $15,000. Additionally, while the state has no individual income tax, it did have the nation’s largest corporate income tax collections, $1,003 per capita. This was more than twice any other state. Tax collections from oil companies operating in the state are currently so high that Governor Sean Parnell is considering lowering taxes to promote increased production.

2. Florida

- Tax collections per capita: $1,718 (7th lowest)

- State revenue per capita: $3,974 (3rd lowest)

- State spending per capita: $4,441 (the lowest)

- Federal aid as a pct. of revenue: 36.9 percent (23rd highest)

- State sales tax rate: 6.00 percent (16th highest)

In 2011, Florida brought in just $3,974 in revenue per resident, the third lowest of all states. Since revenue was lower than most, spending was also. Total expenditures per capita in 2011 was just $4,441, the lowest of all 50 states. That year, just $1,306 per capita was spent on education, among the lowest in the country. In 2011, under the leadership of Governor Rick Scott, the budget was cut further in areas like education and child welfare. Yet in February the Governor introduced a new budget of more than $74 billion that includes pay raises for teachers and state workers and expands health care services for the disabled.

3. Nevada

- Tax collections per capita: $2,333 (25th lowest)

- State revenue per capita: $3,848 (2nd lowest)

- State spending per capita: $4,848 (4th lowest)

- Federal aid as a pct. of revenue: 27.1 percent (5th lowest)

- State sales tax rate: 6.85 percent (8th highest)

At 0.90 percent of assessed home value, Nevada’s effective property tax rate for 2011 was just below the national average of 1.12 percent. But after the housing crisis caused property values to tumble, local budgets have been strained by the loss of property taxes. This is especially troubling in a state with no income tax. The state’s revenues totaled just $3,848 per capita in 2011, less than all but one state. This was partly because it received less in government revenues than all but four others, at just over 27 percent in 2011. Additionally, as one of the nation’s most frugal spenders, Nevada did not need to raise much money. As of 2011, no state spent less on public welfare than Nevada’s $781 per capita.

4. South Dakota

- Tax collections per capita: $1,682 (3rd lowest)

- State revenue per capita: $5,028 (18th lowest)

- State spending per capita: $5,459 (10th lowest)

- Federal aid as a pct. of revenue: 45.6 percent (4th highest)

- State sales tax rate: 4.00 percent (tied for 2nd lowest)

South Dakota only collected $1,682 in taxes per capita in 2011, lower than all but two states. Due to lower tax collections, the state had lower spending on government programs. In 2011, expenditures per capita were just $5,459, significantly less than the $6,427 spent on average by all states across the country. Education expenditures were just $1,578, the eighth lowest of all states and well below the $1,901 spent per capita across the U.S. South Dakota was also more deeply indebted than most states -- debt per capita was $4,321, in the top third of all states.

Click here to see the rest of 24/7 Wall St.'s States with No Income Tax

[Esme12, ASN, BSN, RN]

There are 3 certainties in life...birth, death and taxes.

[Esme12, ASN, BSN, RN]

LOL! Gonna have to trust me on this one. Unless a state has seceded from the Union, its citizens ARE paying Federal income tax. Do you really think the IRS (or all the other states, for that matter) would allow entire state populations to just decide not to pay taxes?!

If this were the case, don't you think there'd be a mass influx into those states and out of the federal tax-paying states?

p.s. I really can't believe we're having this conversation.

I just sit and shake my head.

[classicdame, MSN, EdD]

no state income tax in Texas. Local sales tax is 8%, but part of that goes to state and part remains in the county. So sales tax will vary from county to county. Property tax is reasonable, forget the amount. The only fuss I have is that the property tax goes UP every blessed year. Once I reached 65 it was frozen for me, but I paid years of what I thought was too much property tax.